Brits face water bills soaring by at least a fifth – and far more in some areas – as Labour claims firms need cash to fix sewers
An eye-watering round of increases is set to be announced by regulator Ofwat later this week, despite fury at the performance of operators.
Environment Secretary Steve Reed admitted today that consumers will be ‘angry’ at the looming hikes, expected to add a minimum of £100 to average annual costs over the next five years.
Thames Water’s chief executive last week defended bosses sharing £770,000 in bonuses despite the firm battling a huge debt mountain and pumping out even more sewage. It has been pushing for bills to go up more than 50 per cent by the end of the decade.
In an article for the Telegraph, Mr Reed argued that water rationing could be needed by the 2040s without drastic increases in investment.
Mr Reed pledged the additional money would go towards fixing leaky pipes and building reservoirs instead of paying executives their bonuses.
Ofwat has been engaged in intense negotiations with water companies over the scale of the rises.
The watchdog originally knocked back demands for hikes of more than 21 per cent over five years.
But extraordinarily companies responded by asking for even more. They wanted the average consumer bill in England and Wales rise by 40 per cent between now and 2030 – costing £615 per year.
Those proposals would have seen Southern Water customers hammered with an 84 per cent increase over the period.
Campaigners and politicians slammed the companies for ‘greed’, saying they were ‘sucking the dregs’ out of customers.
Steve Reed (pictured) admitted that British citizens will be ‘angry’ at the rise, which is expected to add an average of £100 to water bills over the next five years
Ofwat is due to announce the final figures on Thursday.
Earlier this year, companies asked Ofwat for bills averaging £585 by 2030, up about one-third from the current average of £439.
The regulator’s draft price review in July pared back those requests to an average of £535.
However, 10 of the 11 water companies then hit back with even higher requests than before.
Mr Reed wrote: ‘If you see cracks in the wall of your house and do nothing about it for years, the problem gets worse and you end up paying more,’ he said.
‘That’s what’s happened with our crumbling water and sewage system. Customers have been left to pay the price of Conservative failure.’
But shadow environment secretary Victoria Atkins said: ‘Labour spent years making promises to the public about improving waterways yet, six months after the election, all they do is talk about the Conservatives. Labour’s lack of energy and action will not wash when bills rise on their watch.
‘The Conservatives began the crucial reform to ensure that in the long-term Britain’s water system is clean and sustainable – that requires billions of pounds of private of investment if bill-payers are to be protected.
‘The Government must work out what it’s doing and who will pay for this investment, or our water bills will keep rising under Labour.’
Labour is preparing to sweeten the increases with reforms ringfencing extra money so it must be spent on new infrastructure.
Mr Reed said he would also be pushing through new legislation that mandates reporting on sewage leaks.
The new law would meant that water bosses who refuse to cooperate with investigations into spillage face prison time.
‘This is a once in a generation chance to reset our water sector and deliver the change we all want to see,’ Mr Reed added.
‘After years of pollution and decline it’s time to invest in new opportunities and restore our clean rivers, lakes and seas.’
Earlier this year, brazen water bosses put in a request to increase bills by up to 84 per cent.
All 11 water and wastewater firms originally requested bill rises from the regulator in July, but these figures have now been revised by the companies.
Taken together, the companies want bills to rise 40 per cent on average and cost £615 a year by 2030, compared to the current average bill of £439 a year.
This is despite the fact that water bosses have been given eyewatering bonuses.
Thames Water’s chief executive defended bosses sharing £770,000 in bonuses despite the firm battling a huge debt mountain and pumping out even more sewage.
The water firms provide supplies to England and Wales
Sewage is seen floating in the Thames near Windsor, Berkshire – environment secretary Steve Reed wrote: ‘Our rivers, lakes and seas are choked by pollution’.
Chris Weston insisted ‘competitive packages’ were needed to attract ‘talent’ to work at his crisis-stricken company even though regulators said the payouts were unjustified.
Mr Weston took on the job in January and was awarded a £195,000 bonus for his first three months at the firm.
Ofwat revealed last month that Thames Water was planning to use customer cash to pay bosses’ bonuses, but ruled that it was not ‘justified’.
The firm is in about £16billion of debt and is trying to secure another £3billion to keep it running beyond mid-next year.